Business Context and Reporting Period
This Form 6-K filing by GRAVITY Co., Ltd. (NasdaqGM: GRVY) covers the month of September 2010. Gravity is a South Korea-based online game developer and publisher, best known for its principal product, Ragnarok Online, which is offered in 59 markets.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures for the reporting period. The primary financial data disclosed relates to a specific corporate transaction:
- Acquisition Target: 50.8% equity interest in Barunson Interactive Co., Ltd.
- Purchase Price: KRW 11,688 million (approximately US$10,126 thousand).
- Expected Closing Date: On or about October 25, 2010.
Material Changes
The material change reported is the agreement signed on September 28, 2010, to acquire a controlling interest in Barunson Interactive. Upon closing, Gravity will control the management of Barunson Interactive and appoint the majority of its board of directors. Barunson Interactive currently operates two commercial MMORPGs, Dragonica and Dragonraja, and has one title under development.
Outlook, Management Commentary, and Risks
Management Commentary: CEO Toshiro Ohno stated the transaction is intended to strengthen online game development capabilities, secure a quality game lineup, and diversify revenue sources. He expects the deal to create significant value through synergy between the two development teams.
Forward-Looking Statements: The filing includes standard disclaimers that forward-looking statements are subject to risks and uncertainties. The company assumes no duty to update these statements.
Risks and Contingencies: The transaction is subject to customary closing conditions. No other specific risks or contingencies were detailed in this specific filing.
Investor Verification Checklist
- Verify the final closing of the Barunson Interactive acquisition on or about October 25, 2010.
- Confirm the exact exchange rate used for the US$10,126 thousand conversion at the time of closing.
- Review subsequent filings for the impact of this acquisition on Gravity's consolidated financial statements.
- Monitor the commercial performance of Barunson Interactive's titles, specifically Dragonica and Dragonraja.